Insuring the driver or the vehicle?

Submitted by Anonymous (not verified) on Tue, 11/06/2007 - 05:36

I am a very responsible parent, but like roxannenm, I wonder if I have to put my kids on my policy as an additional driver. When you purchase insurance, aren't you insuring the matter who is driving? If I let a friend borrow my car, doesn't insurance apply to them if they're in an accident? I realize insurance companies take a risk with teenage drivers, but that's the nature of their business. If a person never has an accident or makes a claim, will the insurance carrier REMIBURSE any premiums?

Posted: 06 Nov 2007 06:31 Post Subject:

Hi ButIAmResponsible, when you know it already then why ask? If your teen hit and kill someone, who will then be responsible for the losses? If the teen drives your car frequently, add him/her to your policy. It'll certainly increase your premium to some extent but at the same time will keep you covered from the damages caused by the young driver.

Posted: 06 Nov 2007 07:05 Post Subject: permanent license

Hi, It makes sense to add him but only after he owns a permanent license. In case your car is an expensive one, then also its safer to get your child an older one with a separate policy!
Clara DeViliers

Posted: 06 Nov 2007 09:27 Post Subject: teenagers' lives..

Yes my friend, driver permits are absolutely necessary. It falls under the basic criteria to let the teens ply easily on road. I hope you understand the fact that the drivers falling under the age group 16-24 are under the highest-risk category. It is understandable that to reduce the costs you may wish to keep him out of your coverage for the time, but at the same time you must also remember the facts associated with crashes- (i) if your teenager crashes with your car, then you'll never get something out of the policy in case he is not included in your policy. (ii) older vehicles bear lesser risk for insurers. I wish you empathize with me n help safeguard your teenagers life!
Joshua Paul

Posted: 06 Nov 2007 10:48 Post Subject:

Good morning ButIAmResponsible, and welcome to the community,

I wonder if I have to put my kids on my policy as an additional driver

Yes, if they are going to drive it, either buy them a 'cheaper' one to be rated on, add them to your policy or EXCLUDE them completely.

If I let a friend borrow my car, doesn't insurance apply to them if they're in an accident?

Yes, but then she is an 'occasional' driver you said it yourself 'borrow', if the vehicle is available for her 'regular' use, then she should be a listed driver as well...

When you purchase insurance, aren't you insuring the matter who is driving?

Well yes and no, you are insuring the vehicle's value (collision and comp), but the company is also assuming the risk of the drivers for not only the damage they cause to the vehicle (again coll and comp) but also for all the liablity coverages, which of course can get into the hundreds of thousands of dollars....

Let's be honest here, assume there is no such thing as vehicle insurance and we all have to take care of our own losses,(there is no liablity in the world) only our own vehicles to take care of and pay out of pocket for all damage/loss should there be an accident (get dream huh?) ! You have two cars in your garage, one is 100k vehicle and the other is a 5k vehicle which one are you going to let Jr. drive with any regularity? You know you're putting him/her into the 5k vehicle. Why? Because you are willing to assume that risk, but not the risk of Jr. tearing up or totalling your 100k vehicle because of inmaturity, and inexperience. Isn't that what you are asking your carrier to do?

It is not fair, nor is it ethical to expect an insurance company to assume the risk of a 16 year old regularly driving a vehicle that is rated for a 40 year old driver. I'm sorry it's just NOT!

You might also want to check your state laws, as well as your own policy wording they all differ (states), it could be that should Jr. have an accident regardless of the liablity limits you have and pay for, they could be reduced to the state min. should there be a loss with him/her driving which could cause you ENORMOUS financial hardship.

Posted: 06 Nov 2007 04:56 Post Subject: Insuring Driver or Vehicle

Lori did an excellent job in answering your questions, but I just wanted to add a couple of comments.

If a person never has an accident or makes a claim, will the insurance carrier REMIBURSE any premiums?

There are companies out there (MetLife is one) who will give you a credit toward your policy deductible for each year you go claims free. So, let's say the annual credit is $50 and your collision deductible is $500. Now, you go five years without an accident and then WHAM! - your collision deductible is only $250.

In any insurance, we pay for the "unknown risk", just like health insurance or any other type - usually no refunds if we don't use it.

I would caution you on the "borrowing" part. Letting someone else use your car to go to the store is one thing, letting them use it to drive to work 5 days a week is another.

Posted: 06 Nov 2007 09:35 Post Subject:

Good question...and some good answers! I need to add this additional info just to make sure you know everything that could happen.

Just about EVERY insurance carrier out there REQUIRES that "all resident members of the insured household" that hold licenses are ON THE INSURANCE POLICY and rated (for premium purposes) appropriately. As many posters have pointed out, the carrier deserves to get the premium for the risk they take on.

I feel your pain...I have THREE teenagers rated on my car insurance, and my premiums are ridiculous!

As far as the potential for excluding the teenagers on the policy: Some carriers will allow for exclusions, others won't. One thing that insurance companys normally will not allow is the "on again, off again" mentality. You will typically NOT be able to exclude them, then in a couple of months when they need to drive the car, add them back on, and then exclude them, etc. Once excluded (with most carriers), always excluded.

Lastly, as a couple of posters (Thank you, Lori) have pointed will typically be responsible for the liability your teenagers incur. Every state out there has their own versions of "financial responsibility" laws that require the registered owner to carry proper liability coverage to protect others against injury and property damage caused by you. Without an insurance policy covering the kids, if your child gets into an accident that's their fault and there's no insurance coverage, several things are likely to occur: YOU will be responsible for the monetary and associated other damages, and the state that you reside in will make your life fairly miserable.

Add the kid, pay the premium, and do it right. The idea of getting your kid an older "liability only" vehicle makes perfect sense, especially if you (the parent) has a higher-end, full coverage car. Check with your agent...hopefully he or she has a clue of the best way to go!

Trust me...the end game of not adding the kid to the policy has the potential of costing you WAY more than if you did add him!

InsTeacher 8)

Posted: 07 Nov 2007 12:35 Post Subject:

Most will understand I mean no harm but... Lori, what they heck was that example :shock: ? You lost me.

A few things for the OP...

Only in _some_ cases does insurance follow the vehicle. In reality, liability follows the operator! Comprehensive and Collision coverage (1st party coverage) follow the vehicle as it's the vehicle that they cover. Liability follows the person as... this is what it protects. If you read over the opening lines of your liability coverage is says something about paying for bodily injury and property damage you become obligated to pay. To go a bit further and address another one of your questions... comprehensive and collision coverage is charged according to the vehicle. Liability is charged based on the _driver_. This means the highest risk driver is rated as driving the highest risk vehicle. This is done simply because he has access to that vehicle and _could_ be driving it. By rating in this way, the insurance company is assured that they are collecting the correct premium for a situation they may have to address. One step further.

As InsTeacher mentioned, some carriers won't allow an exclusion in this situation. An exlusion is a document you sign stating that the insurance company won't be liable for your _son_ if he causes an accident. The underlined part is a give away of my reason why most carrier won't do this. The exclusion is against your son. That means they won't provide him a defense or protection. But _you_ are the owner and therefore usually liable for the use of the vehicle. While the policy excludes coverage for your son, it can't exclude liability coverage to you. So really the exclusion is just remving all 1st party coverage. If you son was excluded from the policy, caused an accident, your insurance company would still need to pay under the liability portion of your policy in order to protect your interest. So... it's free liability coverage! See why most carriers won't do this? :wink: This is also why, as InsTeacher mentioned, carrier require all residence who can drive, to be listed on the policy. Because we all know, if a young driver has a license, they _will_ drive a car.

BTW - my friend's kid just rear ended a vehicle that was stopped in traffic. He's had his license for about 3 months now. Another friend's kid just rolled his truck while doing donuts in a snow covered parking lot (actualy, not even his own truck). Had his license for about 2 months. Wonder why rates are so high?

Posted: 07 Nov 2007 11:06 Post Subject:

Lori, what they heck was that example ? You lost me.

Silly...did I lose anyone else? ha ha...what I was saying was IF there was no insurance, and we paid out of pocket to repair our own vehicles (only no liablity). And she had a very expensive vehicle and a cheap one. Which one would she let her son drive, (assuming she has to pay for ALL damages herself). She would NOT be willing to assume the risk of the teen driving the 100k vehicle...rather she WOULD be willing to assume the risk of letting them drive the cheaper one, (if any vehicles at all). But she is asking the ins carrier to ASSUME ALL risks while not being paid to do so, see? Ok, maybe not my BEST analogy, but was trying to make the point if it was her money, she would assume the lowest risk, if ANY, but she wants to 'back door' her carrier having them assume the risk without paying for it.

Another story about teen drivers...Our daughter had her drivers license for no more than four hours. She had with a permit been driving with her daddy and I for six months. I let her take the car to the 'tanning' place to tan. Not more than three miles from home. Next morning I went to the car to get in and the rt front bumper, turn signal and fender are freakin' wiped out! I got her young butt out of bed and said what is this! Well, she 'felt' something when she was backing out, but didn't get out to look! I went to the tanning salon, she'd hit a gas meter! I guess they installed it while she was tanning! aghhhhhh..... :roll: She cut the wheels too tight and wacked it, (no damage to the meter fortunately)...This is only one of three little accidents she had within six months of her license! And before you ask or wonder, yes, she was on our policy as was her brother when he got his permit, and I also bumped the liab as high as I could. They also got their 'own' vehicles pretty quickly after getting license for this reason, (premium) and had to pay for their own insurance. I didn't turn in the claim, rather paid to fix the vehicle myself, but made her pay us 50% of the total cost of repair (gave her a break since first accident :wink: ) Premiums are outrageous for teen drivers, but for good reason!!!!!!

Posted: 07 Nov 2007 05:13 Post Subject:

Only in _some_ cases does insurance follow the vehicle. In reality, liability follows the operator! Comprehensive and Collision coverage (1st party coverage) follow the vehicle as it's the vehicle that they cover. Liability follows the person as... this is what it protects.

Tcope...excellent illustration. A couple of points to consider are (1) the state that you reside in, and (2) the concept of liability vs. physical damage to the vehicle.

In certain states, insurance does "follow the vehicle." This is insurance-speak for permissive use allowances. Most auto policies allow anyone with a valid drivers license to use the insured vehicle and be covered under the insurance on that vehicle, assuming the car is being used with permission by the driver. Understand that this allowance is not intended to give "free insurance" to anyone. The idea is that, for example, if your neighbor wants to use your truck to pick up a refrigerator and you allow that, your neighbor will be covered under your insurance policy.

I've heard this: "You can use my truck, but if you get into a wreck, YOUR insurance will pay for the damage."

Sorry...that's not how it works. If there is what is referred to as "valid and collectible" insurance, and normally there is, then the owner's insurance policy will pay for the loss. Secondary coverage may occur under the driver of the car's policy if the owner's coverage is insufficient.

Do NOT assume that you don't have to add your resident household members to the policy because of the permissive use language. This is NOT free insurance. "Let's see...since the policy covers anyone who drives my car with permission, I'll just give my teenage son "permission" to drive my car, and he's covered!" Nope...kid's gotta be on the policy. If the insurer discovers that the kid is living in the house or has regular use of the car, they WILL charge premium retroactively to when the kid got his license. That can get real ugly in terms of $$$ to mom and dad!

Tcope was right on target. First vs. third party coverage can be somewhat complicated, but it's crucial that people understand this concept. If you're looking for more info, I'm sure that we can help.

Sounds like, once again, this forum rules!

InsTeacher 8)

Posted: 18 Nov 2007 08:40 Post Subject:

Bottom line, your insurance carrier will want any resident of your home listed as a driver on your policy or else be specifically excluded. They assume that anyone in the home will have access to any of the vehicles.

In my own case, my oldest son received 2 tickets within the first year after getting his license. The insurance company was going to drop us, but after I talked with them they allowed us to exclude him. He did not drive for the next 3 years until he moved out and was responsible for himself.

My youngest son was involved in a minor fender bender. My carrier at that time, National Merit, allowed us to exclude him. I was able to find coverage through Safeco for him at a very reasonable rate. He has had a clean record for the last five years and his premium with safeco has actually decreased.

As an aside, I am still with and would recommend both of these companies.

Posted: 15 Dec 2007 06:57 Post Subject: My Son just recieved his license

He is going to a school dance, we are goingto add him to our policy monday because the office is closed. He doesn't regularly drive my truck, this will be only second time I have allowed him to drive w/o me (he's driven alot with his permit) Can I allow him to use my vehicle tonight even though he is not on our insurence until monday?

Posted: 16 Dec 2007 06:35 Post Subject:

should be ok norm, but you know what i'd do call the agent at home and just let them know...

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